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nment #7 (one) x ( G I G) eztomheducationcomfhmtpx Leander Ofce Products inc. pro-dum and selh small storage and organizational products for o'llc use. During the rst month at operations. the products sold well. Andrea Leander, the ownerof the company, was surprised to see a loss forthe month on her inmme statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager' The slalernenl follows: LEANDER OFFICE PRODUCTS INC. Income Statement Sales [41,409 units) $264360 Variable expenses: Variable cost at goods sold" $125,534 Variable selling and administrative expenses 43,438 175,122 Contribution margin 39,833 Fixed expenses: Fixed manufacturing overhead 90.325 Fixed selling and administrative expenses 14,490 105,313 Operating loss 3 (15,430) \"Consists of direct materials. direct labour, and variable manufacturing overhead. Leander is discouraged over the log shown tor the month. particularly since she had planned to use the statement to encourage investols to purchase stock in the new company. Afriend who is an accountant insiss that the company should be using absorption costing rather than variable ousting. He argues that ii' absorption costing had been used, the company would probably have reported a prot For the month. Selected met data relating to the product and to the rst month of operations follow: Units produced 52.250 Units sold 41,400 Variable costs per unit: Dired materials 3 1.47 Direct labour $ 1.22 Variable manufacturing overhead $ 0.3? Variable selling and administrative expenses $ 1.17 Required: 1. Complete the following: 5. Compute the unit product cost under absorption ousting (Round your answer to 2 decimal places} [5] Assignment #7 (one) ( G '6) eztomheducationcnmfhmxpx ' i O Required: 1. Complete the following: a. Compute the unit product post under absorption ousting (Round your answer to 2 decimal places} b. Redo the oompeny's income statement for the month using absorption ousting. o. Reconcile the variable and abmrplion misting operating income (loss) gures. [Loss amounts should be entered with a minus sign.) Variable mating operating income (less) Add: Fixed manufaduring overhead cost (island in inventory under absorption costing Absorption costing operating income (loss) 5 0 2. Not available in Connect. 3. During the second manlh oi operations. the company again produced 52.200 units but sold 63,000 units. [5] A5 nmem: #7 (one) ( G '6) aztomheducationoomfhmxpx Q ' 0 3. During the swond monlh of upemlione. lhl company again produced 52.200 unils but sold 63,000 unile. [Assume no change in imalxed noel-3.) a. Prepare a oomribuu'un formal income atatamanl for the monm using variabie cooling. Van'able enemas: Fixed expenses: b. Prepare an income sleiemenl for me monlh using absurplion costing. Coelof goods sold: n. Reconcile the variable mating and ammonium mung opereu'ng inonme fig-areal Variable ooeling oparaling income (ioss) Deduol: Fined manulaoluring warhead oust released lrom inventory under absorption 03an Absormion mung opal-alloy income (loss)
